Hong Kong
CNN
—
China’s economic activity has expanded for the first time in four months as the turmoil caused by the abrupt end of the Covid-free policy appears to be fading.
The official Purchasing Managers Index (PMI) for manufacturing, which measures factory activity, jumped from 47 in December to 50.1 in January, according to the National Bureau of Statistics.
It was the first time since September that the score exceeded 50 points. A number above 50 indicates expansion and below that level indicates contraction.
The official non-manufacturing PMI, which tracks activity in the services and construction sectors, jumped from 41.6 in December to 54.4 in January, also the first increase in four months.
This is a sign that China’s Covid “exit wave” is coming to an end, analysts at Nomura said in a research report.
“Looking to February, we expect both manufacturing and non-manufacturing PMIs to rise further as more people adapt to life with Covid,” they said on Tuesday. He added that manufacturing activity would pick up further following the Lunar New Year holidays.
Last week, the Chinese Center for Disease Control and Prevention said: in the report He said China’s current Covid outbreak wave was “coming to an end”.
The official PMI survey mainly targets large companies and state-owned enterprises. The Caixin PMI survey, released later this week, focuses on small businesses.
China scrapped most of its pandemic restrictions in early December, effectively ending its three-year Covid-free policy. However, the sudden change in policy caught the public off guard, and the epidemic spread rapidly.
The coronavirus surge has hit factories and consumer markets, forcing people to stay indoors and forcing factories to close due to reduced workforces. But it seems the chaos is over.
“The official PMI shows that economic activity has picked up sharply this month as the turmoil from the wave of reopening has subsided,” said Sina Yue, China economist at Capital Economics.
All components of the index improved this month.
The services sector saw the biggest recovery, rising from a record low of 39.4 in December to 54 in January, as a huge rise in Covid infections forced people to stay home.
“The strong recovery was largely driven by the release of demand for face-to-face services such as tourism, hospitality and entertainment, which have been hit hardest by the pandemic in the past three years,” Nomura analysts said. people flocked to the city, watched fireworks, and flocked to restaurants and hotels.”
According to data released by the Ministry of Culture and Tourism last week, a total of 308 million trips were made by domestic travelers during the Lunar New Year holiday, up 23% from the same period last year. It’s also close to pre-pandemic levels, equivalent to 89% of what he was in 2019.
“With zero COVID in the rearview mirror, the recovery should remain strong in the short term,” said Yue.
